Company Provided Health Insurance

[terbear323]

What is the name of your state (only U.S. law)? Idaho

The company that I've worked for for five years has been providing health insurance for all full-time employees at no cost to the employee. On Monday, March 30, 2009, we were informed that starting April 1, 2009 the company would now be paying half of our insurance premium and we, the employees, would now have to pay the other half of the premium, which comes to (approximatey)$200 per employee. We were told that we could either write a check to the company every month or we MUST take a reduction in pay (approximately $1.16 per hour per employee). We were informed that we could opt-out, but not until the end of September when the insurance company has open-enrollment, or immediately only if we have coverage through a spouse. Here is my question...Can our employer force us to pay for insurance that we cannot afford? Given the option, most of the employees would rather opt-out now than pay $1000 over the next five months, but are told that we don't have that option. What exactly are our options at this time and does anyone have any advise for us?

 

[ecmst12]

Something does not sound right there.

 

[cbg]

Federal law limits the times that an employer can legally allow employees to add or drop coverage (or add or drop dependents). If open enrollment is not until September, and if the plan document does not SPECIFICALLY list an increase in premiums as a qualifying event to make changes to coverage, your employer not only legally can require that you remain on the plan until open enrollment, they would be in violation of the law if they did not so require.

 

[CraigFL]

Federal law limits the times that an employer can legally allow employees to add or drop coverage (or add or drop dependents). If open enrollment is not until September, and if the plan document does not SPECIFICALLY list an increase in premiums as a qualifying event to make changes to coverage, your employer not only legally can require that you remain on the plan until open enrollment, they would be in violation of the law if they did not so require.

This may be true if you are talking about changing the insurance plan but I think the employer is considering rescinding their 100% contribution toward the plan so that they only have to pay 50% which is typically the minium of what the insurer requires. So.... if it's just an employer thing, why couldn't this be done anytime.

 

[cbg]

Read my post carefully. I didn't say anything about the employer changing the premium payments. I was talking SOLELY about the employer allowing employees to drop coverage BECAUSE OF the change in premium payments.

The employer CAN change the amount they pay towards the premium. They CANNOT allow employees to then drop coverage.

 

[ecmst12]

But what about accepting a check from the employees? Wouldn't the employee contributions HAVE to be in the form of pre-tax payroll deductions in order to preserve the tax-exempt status of the plan?

 

[cbg]

You'll have to ask a tax attorney that one. I know what the rules and regs are from the benefits side, but with that you're getting into payroll. Which is NOT my field.

All I can tell you is, the law does not prohibit the employer from changing the amount that they will contribute to the premium, but does limit when an employee can enroll or disenroll themselves or their dependents.

 

[pattytx]

I'm not sure that having the employee write a check would invalidate the plan in total, but**************....

Why would you do that when you can have the deductions taken pre-tax? Makes no logical sense.

The "salary reduction" the employer speaks of IS, in fact, basic to a pre-tax plan. Your taxable salary is reduced by the amount contributed.